Exhibit 10.30
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[Xxxxxxx Logo]
September 13, 2004
Xx. Xxx Xxxxxxxx
Chairman & CEO
WARP Technology Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Dear Xx. Xxxxxxxx:
This letter agreement (the "Agreement") confirms that WARP Technology Holdings,
Inc.
("Client") has engaged Xxxxxxx Securities, Inc. ("Xxxxxxx") to act on a best
efforts basis as a non-exclusive financial advisor and placement agent for the
Client in connection with the structuring, issuance, and sale (the
"Transaction") of debt and equity securities (the "Securities") for financing
purposes. Xxxxxxx Securities, Inc. is an investment banking firm registered as a
broker-dealer with the U.S. Securities and Exchange Commission (SEC), and member
of the National Association of Securities Dealers (NASD) and Securities Investor
Protection Corporation (SIPC).
Accordingly, we mutually agree as follows:
1. Upon execution of this agreement, you agree to pay Xxxxxxx a non-refundable
retainer of $50,000.
2. Transaction. Xxxxxxx expects to participate in a private placement, currently
anticipated of up to ten million dollars ($10,000,000), involving the sale of
the Client's Securities to accredited, institutional investors ("Investor" or
"Investors") before September 30, 2004. The actual terms and structure of the
Transaction will depend on market conditions and will be subject to negotiation
between the Client and Xxxxxxx and prospective Investors.
3. Engagement. In connection herewith, Xxxxxxx shall provide the following
financial advisory and placement agent services on a non-exclusive and best
efforts basis to Client:
a. advise the Client with respect to the form and structure of the
Transaction;
b. assist the Client in developing any necessary materials;
c. identify and make contact with prospective Investors;
d. assist the Client in conducting presentations and due diligence
meetings with prospective Investors; and
e. provide such other financial advisory and investment banking services
as are reasonably necessary to consummate the Transaction.
Xxxxxxx shall devote such time and efforts to the affairs of the Client as is
reasonably necessary to render the services contemplated by this Agreement. Any
work or task of Xxxxxxx provided for herein which requires Client to provide
certain information to assist Xxxxxxx in completion of the work shall be excused
(without effect upon any obligation of Client) until such time as Client has
fully provided all information and cooperation necessary for Xxxxxxx to complete
the work. The services of Xxxxxxx shall not include the rendering of any legal
opinions or the performance of any work that is in the ordinary purview of a
certified public accountant. It is expressly understood and agreed that Xxxxxxx
shall have no power to bind Client to any Transaction or contract obligation.
Client shall have the right to refuse any Transaction proposal
presented to it without incurring any obligations to Xxxxxxx. However, once a
term sheet is signed by and between the Client and an Investor introduced by
Xxxxxxx (whether or not that occurs during the term of this Agreement), Client
pledges to work in good faith toward a closed Transaction and pledges not to use
the Xxxxxxx term sheet to "shop" offers from other financing sources.
Notwithstanding the foregoing, the Client shall at all times maintain a right to
accept capital investment other than, or in addition to, that which is
contemplated herein or in any term sheet.
It is understood and agreed that the execution of this Agreement shall not be
deemed or construed as obligating Xxxxxxx to purchase any of the Securities and
there is no obligation on the part of Xxxxxxx to place the Securities. Although
Xxxxxxx cannot guarantee results on behalf of the Client, it shall use its best
efforts to provide the services listed above.
4. Success Fee. Client agrees that should Client accept financing from (i) any
Investors introduced to Client by Xxxxxxx during the term of this Agreement,
which is defined in Section 7 below, or (ii) any Investors introduced by Xxxxxxx
to the Client prior to the date who invested in the Client's Series B 10%
Cumulative Convertible Preferred Stock or the Client's Series B-2 Preferred
Stock (collectively such Investors are referred to as the "Xxxxxxx Investors),
or if Client should for a period of eighteen (18) months following the
termination of this Agreement accept financing from any Xxxxxxx Investors, there
shall become due and payable via wire transfer to Xxxxxxx immediately upon
consummation of each Transaction, a cash fee equal to ten (10) percent of the
gross proceeds from the sale of Securities to Xxxxxxx Investors in such
Transaction. Upon completion of the initial Transaction as contemplated in
Section 2 above, we agree, with respect to ISIS and/or any of its affiliates, to
reduce our fee to 2% cash and 2% warrants on any subsequent investments up to
$10 million received by the Client from ISIS and/or any of its affiliates and to
further reduce our fee to 1% cash and 1% warrants on any investments the Client
receives thereafter from ISIS and/or any of its affiliates up until the
expiration of this Agreement, or during the period of eighteen months following
termination of this Agreement.
5. Warrants.
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(a) As additional consideration for each completed Transaction, upon
the sale of Securities, Client shall immediately xxxxx Xxxxxxx and/or its
designees (who are accredited investors) warrants for the purchase of an amount
equal to ten (10) percent of the Securities to be issued in the Transaction to
Xxxxxxx Investors. The warrants shall be exercisable into Securities
substantially similar to those issued in the Transaction, and will have an
exercise price and term consistent with the warrants issued to the Investors (if
any, or if no warrants were issued to the Investors in the Transaction, then the
exercise price shall be equal to the per share price of the Securities sold in
the Transaction and the warrants shall contain other terms substantially similar
to those contained in warrants previously issued to Xxxxxxx by Client).
Notwithstanding the foregoing, the amount of shares that may be acquired upon
exercise of such warrants shall be reduced to 2% or 1% of the Securities sold,
as provided in Section 4.
(b) Upon the Client receiving gross proceeds of $10 million from
Xxxxxxx Investors in the Transaction described in Section 2, the Client agrees
to issue additional warrants to purchase 5,000,000 shares of WARP Technology
Holdings, Inc. common stock at an exercise price of $.05 per share, to Xxxxxxx
Securities, Inc.
(c) All the warrants shall contain piggyback registration rights and a
net exercise provision substantially similar to those contained in warrants
previously issued to Xxxxxxx by the Client.
6. Expenses. The Client shall reimburse to Xxxxxxx all out-of-pocket expenses
incurred in connection with services hereunder upon request, whether or not a
Transaction is consummated. However, any expenses over five hundred dollars
($500) shall be pre-approved in writing by the Client prior to being incurred.
7. Term. The term of this Agreement shall be six (6) months. Additional
extensions may be negotiated as necessary at the mutual written consent of the
Client and Xxxxxxx. Upon termination, Xxxxxxx shall be entitled to collect all
fees and warrants earned and expenses incurred through the date of termination
(to the extent such fees, warrant or expenses were due but unpaid at such time).
8. Representations, Warranties, and Indemnification. Each of the Client and
Xxxxxxx represents and warrants to the other party that this Agreement has been
duly authorized, executed and delivered; and, assuming the due execution by the
other party, constitutes a legal, valid and binding agreement, enforceable
against the party in accordance with its terms. The Client and Xxxxxxx each
agrees to comply with all applicable securities laws, and Client will disclose
to Xxxxxxx all information necessary for Xxxxxxx to act upon Client's request
and to notify Xxxxxxx promptly of any material changes to such information. The
Client agrees that it will engage its legal counsel to assist in the preparation
of any private placement memorandum, subscription agreement, or other legal
documents or definitive agreements deemed necessary to facilitate the
Transaction contemplated herein; and that, subsequent to the successful closing
of the Transaction, Client and its legal counsel will work diligently and
expeditiously to issue any shares and/or warrants as may be required by
Investors. Additionally, the Client agrees to indemnify Xxxxxxx and its
affiliates in accordance with the terms and conditions contained in Exhibit A to
this Agreement.
9. Confidentiality. Xxxxxxx and Client each agree to keep confidential and
provide reasonable security measures to keep confidential information where
release may be detrimental to their respective business interests. Xxxxxxx and
Client shall each require their employees, agents, affiliates, other licensees,
and others who will have access to the information through Xxxxxxx and Client
respectively, to abide by the confidentiality provisions contemplated by this
Agreement in perpetuity. Xxxxxxx will not, either during its engagement by the
Client pursuant to this Agreement or at any time thereafter, disclose, use or
make known for its or another's benefit any confidential information, knowledge,
or data of the Client or any of its affiliates in any way acquired or used by
Xxxxxxx during its engagement by the Client. Confidential information, knowledge
or data of the Client and its affiliates shall not include any information that
is, or becomes generally available to the public other than as a result of a
disclosure by Xxxxxxx or its representatives. Notwithstanding the foregoing,
Client hereby authorizes Xxxxxxx to transmit to prospective Investors,
information and materials provided by Client and/or developed by Xxxxxxx on
behalf of Client upon approval by Client of such materials. Additionally, at any
time after the public announcement of a consummated Transaction by Client,
Xxxxxxx may place a customary announcement in such newspapers and publications
as it may choose, stating that Xxxxxxx has acted as financial advisor and
placement agent to the Client in connection with the Transaction, and may use,
from time to time, the Client's name and logo and a brief description of the
Transaction in publications and/or marketing materials prepared and/or
distributed by Xxxxxxx.
10. Non-Circumvention. In and for valuable consideration, Client hereby agrees
that Xxxxxxx may introduce (whether by written, oral, data, or other form of
communication) Client to one or more Investors, including, without limitation,
natural persons, corporations, limited liability companies, partnerships,
unincorporated businesses, sole proprietorships and similar entities
(hereinafter an "Investor" or "Investors"). Client further acknowledges and
agrees that the identity of the subject Investors, and all
other information concerning Investors (including without limitation, all
mailing information, phone and fax numbers, email addresses and other contact
information) introduced hereunder are the property of Xxxxxxx, and shall be
treated as confidential and proprietary information by Client, it affiliates,
officers, directors, shareholders, employees, agents, representatives,
successors and assigns. Client shall not use such information, except in the
context of any arrangement with Xxxxxxx in which Xxxxxxx is directly and
actively involved, and never without Xxxxxxx'x prior written approval. Client
further agrees that neither it nor its employees, affiliates or assigns, shall
enter into, or otherwise arrange (either for it/him/herself, or any other person
or entity) any Transaction or business relationship, contact any person
regarding such Investors, either directly or indirectly, or any of its
affiliates, or accept any Transaction, compensation or advantage in relation to
such Investors except as directly though Xxxxxxx, without the prior written
approval of Xxxxxxx. Xxxxxxx is relying on Client's assent to these terms and
their intent to be bound by the terms by evidence of their signature. Without
Client's signed assent to these terms, Xxxxxxx would not introduce any Investors
or disclose any confidential information to Client as herein described. For the
avoidance of doubt and notwithstanding the foregoing, the parties agree that
Client may use such information and enter into Transactions and other business
relationships with such Xxxxxxx Investors, without Xxxxxxx'x approval and
without any fee or other compensation due to Xxxxxxx, at any time eighteen
months after the termination of this Agreement.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of NewYork applicable to contracts
executed and to be wholly performed therein. The Client and Xxxxxxx hereby agree
that any dispute concerning this Agreement shall be resolved through binding
arbitration before the NASD pursuant to its arbitration rules. The prevailing
party shall be entitled, in addition to such other relief that may be granted,
to a reasonable sum of attorney's fees and any other costs and expenses relating
thereto.
12. Entire Agreement. This Agreement represents the entire agreement by and
between the Client and Xxxxxxx and supersedes any and all other agreements,
either oral or written, with respect to the subject matter of this Agreement,
including without limitation, that certain Agreement between the parties dated
June 20, 2003; provided, however, that the parties acknowledge and agree that
this Agreement does not supercede that certain Settlement Agreement between the
parties dated September 13, 2004. Each party to this Agreement acknowledges that
no representation, inducements, promises or agreement, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. The Client and Xxxxxxx
hereby agree that the opening and closing statements of this Agreement are
incorporated herein by this reference and made a material part of this
Agreement. If any part of this Agreement is found, or deemed by a court of
competent jurisdiction, to be invalid or unenforceable, that part shall be
severable from the remainder of the Agreement. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. Any
modification of this Agreement will be effective only if it is in writing and
signed by the Client and Xxxxxxx.
Please initial each page, sign below, and return an original and one copy of
this letter to the undersigned to indicate your acceptance of the terms set
forth herein, whereupon this letter and your acceptance shall constitute a
binding agreement by and between WARP Technology Holdings, Inc. and Xxxxxxx
Securities, Inc. as of the date first above written.
We appreciate the opportunity to be of service and look forward to a cooperative
working relationship with you and your staff.
Sincerely,
Xxxxxxx Securities, Inc.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: CEO
Accepted and Agreed:
WARP TECHNOLOGY HOLDINGS, INC.
By: /s/ Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: CEO
EXHIBIT A
This Exhibit A is a part of and is incorporated into that certain letter
agreement dated September 13, 2004 between WARP Technology Holdings, Inc. (the
"Client") and Xxxxxxx Securities, Inc. ("Xxxxxxx"). The letter agreement and
this Exhibit A are referred to herein as the "Agreement". Capitalized terms used
herein without definition shall have the meanings ascribed to them in the letter
agreement.
The Client agrees to indemnify and hold harmless Xxxxxxx, any affiliates and the
respective officers, directors, partners, employees, representatives and agents
and any other persons controlling Xxxxxxx or any affiliates within the meaning
of the Securities Act of 1933 or the Securities Exchange Act of 1934 (Xxxxxxx
and each such other person or entity each being referred to as an "Indemnified
Person"), to the fullest extent lawful, from and against, and the Indemnified
Persons shall have no liability to the Client or its owners, affiliates,
controlling persons, security holders or creditors for, all claims, liabilities,
losses, damages and expenses, including without limitation and as incurred,
reimbursement of all costs of investigating, preparing, pursuing, or defending
any such claim or action, including fees and expenses of counsel to, and the per
diem costs and expenses of personnel of, the Indemnified Person (collectively,
"Losses"), whether or not arising out of pending or threatened litigation,
governmental investigation, arbitration or other alternative dispute resolution,
or other action or proceeding (individually a "Proceeding" and collectively
"Proceedings"), directly or indirectly related to or arising out of, or in
connection with (i) actions taken or omitted to be taken by the Client, its
affiliates, employees, directors, officers, partners, representatives or agents
in connection with any transaction or activities contemplated by this Agreement;
(ii) actions taken or omitted to be taken by any Indemnified Person pursuant to
the terms of, or in connection with services rendered pursuant to, this
Agreement, provided that in the case of this subsection (ii) the Client shall
not be responsible for any Losses arising primarily out of or based primarily
upon the willful misconduct or gross negligence (as determined by the judgment
of a court of competent jurisdiction, no longer subject to appeal or further
review) of or by such Indemnified Person; and (iii) any untrue statement or
alleged untrue statement of material fact contained in any Information or any
omission or alleged omission to state a material fact necessary to make the
statements therein not misleading (other than untrue statements or alleged
untrue statements in, or omissions or alleged omissions from, information
relating to an Indemnified Person furnished in writing by or on behalf of such
Indemnified Person expressly for use in such Information).
If the indemnification provided for under this Agreement is unavailable to an
Indemnified Person in respect of any Losses, then the Client, in lieu of
indemnifying such Indemnified Person, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Client on the one hand and by Xxxxxxx on the other, from the services rendered
under this Agreement, or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Client on the one hand and the Indemnified Person on the
other, as well as any other relevant equitable considerations. It is further
agreed that the relative benefits to the Client on the one hand and Xxxxxxx on
the other hand with respect to the services rendered under this Agreement shall
be deemed to be in the same proportion as (i) the aggregate transaction value
bears to (ii) the fees actually paid to Xxxxxxx with respect to the services
provided pursuant to this Agreement in connection with the transaction. The
Client also agrees that no Indemnified Person shall have any liability to the
Client for or in connection with this Agreement and the engagement of Xxxxxxx
hereunder, except for such Losses incurred by the Client to the extent
determined by the judgment of a court of competent jurisdiction, no longer
subject to appeal or further review, to have resulted primarily from such
Indemnified Person's willful misconduct or gross negligence, and the Client
agrees that in no event shall the Indemnified Persons be required to contribute
an amount in the aggregate greater than the fees actually received by Xxxxxxx
for its services performed under this Agreement.
If any Proceeding is commenced as to which an Indemnified Person demands
indemnification, the Indemnified Person shall have the right to retain counsel
of its own choice to represent it, the Client shall pay the reasonable fees and
expenses of such counsel, and such counsel shall to the extent consistent with
its professional responsibilities cooperate with the Client and any counsel
designated by the Client, provided, that in no event shall the Client be
required to pay fees and expenses under this indemnity for more than one firm of
attorneys for the Indemnified Person in any jurisdiction in any one legal action
or group of related legal actions. The Client shall be liable as provided herein
for any settlement of any claim against Xxxxxxx or any Indemnified Person made
with the Client's written consent, which consent shall not be unreasonably
withheld. The Client agrees that it will not, without the prior written consent
of Xxxxxxx, settle or compromise or consent to the entry of any judgment in any
Proceeding (whether or not any Indemnified Person is a party thereto) unless
such settlement, compromise or consent includes an unconditional release of
Xxxxxxx and each other Indemnified Person from all liability arising or that may
arise out of such Proceeding.
The indemnity and contribution obligations of the Client set forth herein shall
be in addition to any liability or obligation the Client may have to any
Indemnified Person at common law or otherwise. The Client hereby consents to
personal jurisdiction, service and venue in any court in which any claim, which
is subject to this Agreement, is brought against Xxxxxxx or any other
Indemnified Person.
